Encounter scores big JV deal with major miner Independence Group; shares fly
Major miner Independence Group (ASX:IGO) wants a big piece of micro-cap explorer Encounter Resources and its project in the Paterson Province of Western Australia, as speculation about a massive copper find in the region grows.
The Encounter (ASX:ENR) share price immediately jumped almost 38 per cent to 5.5c in morning trade on news the $2.5 billion IGO is a new major shareholder and joint venture partner.
Encounter owns the Yeneena copper and cobalt project in the Paterson Region, where major miners are scrambling to acquire exploration ground after unconfirmed reports of a big copper discovery by Rio Tinto (ASX:RIO).
IGO will subscribe for a $1.8m share placement at 7.5c per share – 60 per cent higher than the 20 day average trading price.
These funds will be used to advance 3D copper target definition and testing at Yeneena, Encounter told investors.
And at any time before March 2020, IGO can also earn 70 per cent of the project by sole funding exploration up to $15m.
Encounter managing director Will Robinson said the Paterson Province was shaping up as a prime location for copper-cobalt discoveries in Australia.
“Recent activity by a number of major mining houses highlights and validates the enormous potential of the region,” he said.
“We are delighted to be working alongside the highly respected IGO team to advance large scale copper-cobalt opportunities along this 70km long corridor.”
Encounter also has five separate joint ventures with major gold miner Newcrest Mining (ASX:NCM) in the Tanami Gold Province and West Arunta in Western Australia.